I defiantly understand the diversification, I live out of state so often struggle to find much information on the area.

Of all of the great ideas people have mentioned, here’s the ones I tend to like most:Buying an apartment building - I was thinking multiple SFRs would give me better diversification but I think some good arguments were made for consolidating costs and liabilities.

These sound like a diversification vehicle maybe what you would want 1/3 of your portfolio focused on? 

It's unlikely to produce a better return than B-class.With the lower-class option, you also get the benefit of diversification.

Personally, I like and am involved in both types of investing for the fact of diversification.

I have talked to two financial planners over the past few months and both of them are more interested in having "diversification" in my accounts and say that I should not "put all of my eggs in one basket" with real estate alone.

Diversification and asset appreciation factor into my REI. 

Here are a few points that I'd take into consideration:Diversification: Rental properties can provide a form of diversification in your investment portfolio.

If selling the home and the cash will yield you better results long term on one property versus keeping and buying another one then yesIt’s truly a numbers game and since we don’t have all the numbers it’s tough to give a straight answer.Personally I would rather have one property than two, while more risk since lack of diversification the headaches of multiple properties would be my reason but this of course may not be the case for others

It provides diversification, as you have multiple rental units.